Owning a home is one of the foundational aspirations of modern society – being a representation of personal success and a signifier of long-term security, as well as a shrewd investment in an asset with evergreen value. Unfortunately, though, home ownership has become something of a prohibitive expense for many people.
Recent movement in the housing market has seen unprecedented growth in property value, with some groups projecting that by the end of 2022, house prices will be 23% higher than their pre-pandemic value. As a result, an increasing number of people are expected to rely on home rental for their living situation.
Whether you have been saving to buy for some time, or are new to the property market, renting will most likely be your next solution in terms of living arrangements – but renting too can come with considerable costs – some of which are more hidden than others. What are these costs, and how can you make the most of a rental situation?
Rent and Deposit
The most obvious, and most significant, expense when it comes to renting out a home is the rent itself. This is a figure you will be aware of up front, from the moment you view a given rental property. Some online services may break down the rent as a weekly figure, but it is most commonly presented as a ‘per calendar month’ or ‘pcm’ figure.
As well as the rent itself, though, there is the matter of the security deposit. This is an amount payable on the signing of your rental agreement, that fulfils the purpose of confirming your intentions to rent, and covering any potential repair costs incurred by the end of your tenancy. This figure can also be variable, but is generally at least a month’s rent, and commonly six weeks’ rent.
The other costs you will need to contend with relate to regular bills. These are common for every household, whether buying or renting, but are nonetheless important to factor in to your monthly household budget. Your basic package of essential, and even compulsory, utilities include gas and electricity, broadband, council tax and your local water bill.
It is also worth mentioning that sometimes, rental agreements can come with utilities included in the overall rent. These are often rental agreements offered by letting agencies, who manage properties on behalf of individual landlords.
Aside from essential monthly utility bills, there are other bills and services for which you may need to budget – and which, though not purely essential, can constitute essential payments for your personal requirements. One of these is a version of home insurance specific to rentals, which can cover you for any damages to the property or furnishings that don’t belong to you. You may also choose to pay for a TV license, which can constitute a yearly shock to any household budget.